Apparently the Federal Government made this term up. I have hardly heard it in all the time that I have been practicing Insurance Coverage law. Perhaps other practitioners and insurance professionals share the experience.
The following statutory definition represents one of the few times that I have found a definition of "hazard insurance" anywhere. It means what "property insurance" means throughout the United States. Note that this Section was amended in 2015, effective in 2016, but the amendment did not affect this definition:
For purposes of this section, the following definitions shall apply:
(1) Flood insurance
The term “flood insurance” means flood insurance coverage provided under the national flood insurance program pursuant to the National Flood Insurance Act of 1968.
(2) Hazard insurance
The term “hazard insurance” shall have the same meaning as provided for “hazard insurance”, “casualty insurance”, “homeowner's insurance”, or other similar term under the law of the State where the real property securing the consumer credit transaction is located.
15 U.S.C.A. § 1639d(i)(1)&(2) (emphasis added). Section 1639d is titled, "Escrow or impound accounts relating to certain consumer credit transactions." Translation: The statute applies primarily to residential mortgage loan transactions.
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015). All rights reserved.